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2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc.

Concho Resources, Inc. · Dec 5, 2012 · 26 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 1
    December 2012 Investor Presentation
  2. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 2
    Concho Resources Inc. Company Highlights Permian Basin Leading pure-play Permian Basin operator p 458 MMBoe year-end 2011 estimated proved reserves1 Results in 3Q 2012: Drilled 213 gross wells Produced 7.8 MMBoe EBITDAX2 of…
  3. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 3
    Permian Basin Current Activity Technology expanding Wolfberry resource potential across Wolfcamp the h PPermian i BBasin i Cline/Penn li Yeso Mississippian Lower Abo Activity targeting unconventional reservoirs…
  4. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 4
    Permian Basin Horizontal Drilling Activity Horizontal Rig Growth since 1Q11 % Horizontal Rigs % Vertical Rigs 495 503 486 434 447 410 420 360 75% 71% 69% 67% 77% 88% 84% 87% 25% 29% 31% 33% 23% 13% 12% 16% 1Q11 2Q11…
  5. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 5
    Operational Strategy Continued focus on the Permian Basin Exposed to some of the most prolific oil plays in the U.S. Capitalize on the strategic benefits of being one of the largest operators in the Permian Basin Committed to…
  6. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 6
    Track Record of Production & Reserve Growth Annual Production (MMBoe) Proved Reserves (MMBoe) 32.9 - 34.3 386.5 28.7 - 29.8 323.5 23.6 211.5 15.6 137.3 10.9 91 0 91.0 7.1 77.8 5.0 3.9 1.2 12.5 17.9 0.1…
  7. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 7
    Cash Margin Unhedged Cash Margin Percentage1 vs. Average NYMEX Natural Gas Price (/MMbtu) 6 80.07 80 5.07 73.24 73.39 70.84 72.01 5 70 66.04 65.96 Realized Price (/Boe) 63.43 63.74 62.49 61.68 5 4.37 60 A Avg. NYMEX Gas G…
  8. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 8
    Significant Leverage to Oil 3Q12 Production Mix 7% Residue 3Q12 Revenue Gas Contribution 7.8 MMBoe 497.5 Million illi 5% Dry Gas 4 41% Wet Gas 95% Liquids (82% Oil) 59% Oil 10
  9. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 9
    Reinvest High Margin Cash Flow into Robust ROR Projects Inventory Rates of Return1 Bone Spring Wolfberry Yeso (Vertical) Avalon Shale (Gas) 63% 55% 49% 53% 45% 38% 36% 44% 28% 27% 36% 28% 27% 25% 23% 20% 70…
  10. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 10
    2013 Capital Budget and Activity 2013 Capital Budget: 1.6bn 2013 Drilling & Completion Budget: 1.4bn Drilling & Completion Facilities Leasehold & G&G Delaware Basin Texas Permian New Mexico Shelf 7% 8% 21% 67% Horizontal 54%…
  11. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 11
    2013 Organic Production Growth Organic Production Reconciliation (MMBoe) 32.9 - 34.3 A Top T half h lf off FY12 production d ti guidance id 1.2 2.1 Includes 6 months of production from Three 29.5 28.6 Rivers Includes 12…
  12. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 12
    Northern Delaware Basin Overview Active Horizons Delaware sands 2,3751 locations targeting: Bone Spring sand (1st/2nd/3rd) Avalon a o sshale ae Bone Spring sands Wolfcamp shale Other targets: Delaware sands Penn shale…
  13. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 13
    Southern Delaware Basin Overview 140,000 gross (125,000 net) acre position Target horizons: Delaware sands Avalon shale Bone Spring sands Wolfcamp shale Encouraging early production Four wells completed with 30 days of…
  14. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 14
    Midland Basin Wolfberry Play Technical team has drilled over 1,000 wells Have added over 500 Wolfberry locations through acquisitions in 2012 Continue to test opportunities in eastern Midland Basin Horizontal Activity Drilled…
  15. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 15
    Southern Midland Basin Southern Midland Expanded position through acquisition of assets from Three Rivers Acquired 39,700 gross (29,000 net) acres Industry ramping up horizontal development across the area Strong industry…
  16. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 16
    New Mexico Shelf Shelf Overview Will average 5 rigs in 2013 3 Horizontal Yeso rigs 2 Vertical Yeso rigs Concho has drilled over 1,000 wells in the Yeso Expanding the play boundary through horizontal development Potential to…
  17. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 17
    Why Invest in Concho Leading Permian producer with focused operations in three core plays Yeso, Delaware Basin and Wolfberry Large, predominately oil and liquids-rich resource base Significant g p potential for reserve and p…
  18. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 18
    Appendix
  19. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 19
    Permian Basin Base of the Wolfcamp Central Delaware Platform Midland Basin Basin DELAWARE CENTRAL MIDLAND PERIOD SERIES BASIN PERIOD SERIES PLATFORM PERIOD SERIES BASIN FORMATION FORMATION FORMATION TANSILL TANSILL UPE…
  20. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 20
    Permian Basin Oil Takeaway Capacity Existing Takeaway Borger Cushing Refineries MBopd Big Spring 70 Holly Frontier Navajo 100 Borger Refinery (net from Permian) 115 Western 125 Wichita Falls Total 410 Oil Pipelines MBopd…
  21. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 21
    Permian Basin NGL Takeaway Capacity Existing Takeaway MBblpd Existing NGL Infrastructure 707 Inflows from Rockies Expansion Capacity NGL Expansions Completion Date MBblpd Lone Star West Texas Pipeline 1Q13 210 DCP Sand Hills…
  22. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 22
    EBITDAX Reconciliation Historical EBITDAX Y ear Ended T hree Months Ended Nine Months Ended Decem ber 31, Septem ber 30, Septem ber 30, (in thousands) 2011 2012 2011 2012 2011 Net incom e…
  23. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 23
    Adjusted Net Income Reconciliation Historical Adjusted Net Income Y ear Ended T hree Months Ended Decem ber 31, Septem ber 30, (in thousands, ex cept per share am ounts) 2011 2012 2011 Net incom e - as reported…
  24. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 24
    Unhedged Cash Margin Reconciliation Historical Unhedged Cash Margin ( in thousands, ex cept per unit data) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Net incom e (loss) 67 ,540 1 24,1 7 1 20,7 7 5 (8,1 1 6) 42,57 5…
  25. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 25
    Hedges as of 12/3/2012 Current Oil and Natural Gas Swaps 4Q 2012 2013 2014 2015 2016 2017 Oil Swaps V olume l (Bbl) ............................................... 4,1 51 ,500 1 3,330,000 7 ,283,000 8 1 ,07 6,000 6 429,000 1…
  26. 2012 Bank of America Merrill Lynch Leveraged Finance Conference – Concho Resources, Inc. – slide 26
    2013 Guidance Concho 2013 Production and Operating Guidance Produ ction: Oil equiv alent (MMBoe) 32.9 - 34.3 % Oil 60% - 62% Price differentials to NY MEX: (ex cluding the effects of hedging) Oil (Bbl) 93% - 95% Natural gas…

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